Sun's pal Fujitsu to work with Intel

The Japanese computing giant plans to come out with dual-processor and multiprocessor servers containing Intel's Xeon chips by the end of 2004. A year after that, it expects to release an Intel Itanium-based mainframe-class system that can hold up to 128 processors.

In addition, Intel and Fujitsu will collaborate on creating a version of the Linux open-source operating system optimized for Fujitsu systems--especially for its large multiprocessing machines.

Over time, the shift toward Intel will likely impact longtime Fujitsu ally Sun Microsystems. With a few exceptions, the Japanese company's servers are built around Solaris--Sun's Unix operating system--and a version of the Sparc RISC chip made by Fujitsu that is similar to Sun's UltraSparc. (Fujitsu-Siemens, a separate joint venture between the two industrialists, sells Intel-based servers in Europe.)

While Fujitsu will continue to sell and develop Sparc/Solaris servers, some of the company's energy will inevitably be diverted toward the new Intel/Linux effort. Jack Hirano, a spokesman for Fujitsu, characterized the upcoming Intel/Linux servers one of the three legs of its server strategy--the other two being the existing Primepower server line and GS mainframe line.

The new Intel servers will be capable of running other operating systems, including Microsoft's Windows, in addition to Linux, said Hirano. Both Fujitsu's Primepower and GS lines come with Solaris.

Sun's collaboration with Fujitsu has allowed it to more deeply penetrate certain markets--such as Japan's--and given the company a high-profile partner to tout its technology.

Fujitsu is "out there evangelizing Sparc and Solaris. From that perspective, Sun wants them around," said David Freund, an analyst at consulting firm Illuminata. "The fact that they still have a Sparc-based road map indicates they still have a strong commitment to the Sparc area. But because they have a broad customer base, they have to embrace the other (Intel) processor."

Fujitsu also represents an incremental revenue stream for Sun. Not only does the company license Solaris, but many of its servers are made by Sun and then sold under the Fujitsu name, said Shahin Khan, chief competitive officer at Sun.

Khan nonetheless downplayed the impact of the deal. "They are kind of a 'me-too' player," he said, with regard to Fujitsu's technology. "They are putting Sparc into areas where (UltraSparc) is not going."

Reaching high
The new deal also marks Intel's further expansion into the upper echelons of the server market. Although more than 80 percent of servers shipped worldwide contain Intel chips, most of these are one- and two-processor boxes running Windows or Linux, according to various research firms. Over half of the revenue in the global market derives from Unix servers, which typically contain chips such as Sun's UltraSparc or IBM's Power4 and can sell for a million dollar or more.

Intel, though, is gaining ground in the four- and eight-processor server segment, which has led to a bitter feud with Sun.

"Itanium is the most expensive disaster in the history of high technology," said Khan of Intel's high-end server chip. For their part, Intel executives often bring up Sun as an example of a company that will be a has-been in the near future.

Fujitsu had been one of the last major manufacturers not to actively sell Intel-based servers--IBM, Hewlett-Packard and Dell Computer, for instance, all include them in their lineups. However, Fujitsu has previously embraced Intel in other areas of its business, such as its PC operation.

Sun, a bitter rival of Intel, has sold low-cost servers containing processors from Intel or Advanced Micro Devices for years, but it does not emphasize them. In addition, Sun released a version of Solaris 9 for Intel servers, which it killed last year but then revived after customers objected.

Cray, the supercomputing pioneer that sells equipment to Sandia National Laboratories and other scientific customers, remains one of the few companies not selling any Intel-based computers.

As for the Linux collaboration between Fujitsu and Intel, more than 300 Fujitsu engineers will be placed in a new Linux division formed for the joint effort. Much of the joint Linux work will focus on improving reliability and manageability on multiprocessing systems.

"While some people say Linux is already there, some others believe improvements need to be made," said Richard Dracott, senior director of Intel's enterprise marketing group.